ANOKA, Minn. - Vista Outdoor Inc . (NYSE: NYSE:VSTO) announced today that its Board of Directors has unanimously recommended that stockholders vote in favor of a transaction with Czechoslovak Group a.s. (CSG) for the acquisition of The Kinetic Group and investment in Revelyst. The proposed CSG Transaction values The Kinetic Group at approximately $2.15 billion, which is around $250 million more than the last proposal presented by MNC Capital (MNC).
The CSG Transaction also includes an agreement for CSG to purchase a 7.5% share in standalone Revelyst for $150 million, implying a valuation of $2.0 billion for Revelyst. Upon closing, Vista Outdoor stockholders are set to receive $28 in cash per share and one share of Revelyst common stock for each share of Vista Outdoor common stock they hold.
Vista Outdoor's Board is also in active discussions with a private equity firm partnered with MNC about a potential separate acquisition of Revelyst, independent of the CSG deal. While no agreement has been finalized, discussions continue.
The Board has rejected MNC's last proposal to acquire Vista Outdoor for $43 in cash per share, concluding that it undervalues the company and does not offer the same value potential as the CSG Transaction.
The Board's decision follows a thorough review process initiated in May 2022, which involved engaging with 26 counterparties. The CSG Transaction, in addition to providing immediate cash consideration, offers stockholders the chance to benefit from the future growth potential of Revelyst, which is expected to establish an initial $50 million share repurchase program following the transaction's close.
All necessary regulatory approvals for the CSG Transaction have been obtained, and the deal is prepared to close in October, pending stockholder approval and other customary closing conditions. The merger agreement with CSG can be terminated after October 15.
Vista Outdoor is urging stockholders to vote for the CSG Transaction at the upcoming special meeting on September 27 to secure the transaction's significant value. The company filed a related investor presentation with the U.S. Securities and Exchange Commission, providing additional information.
This news is based on a press release statement issued by Vista Outdoor Inc.
In other recent news, Vista Outdoor Inc. has announced an agreement to sell a 7.5% stake in its subsidiary Revelyst to Czechoslovak Group a.s. (CSG) for $150 million. The agreement is part of a revised merger deal that will increase the cash consideration payable to Vista Outdoor stockholders. Post-transaction, Revelyst plans to initiate a $50 million share repurchase program. In parallel, Vista Outdoor's board has been in talks with MNC regarding a potential acquisition.
In addition to these developments, Vista Outdoor has approved transaction incentive awards for two of its top executives, Jason Vanderbrink and Eric Nyman, contingent upon the successful execution of a strategic alternative. The company's board of directors was also re-elected, and the compensation of the company's executive officers for fiscal year 2024 was approved.
Meanwhile, Vista Outdoor reported a 7.1% decrease in total sales to $644.2 million and a 6.5% decline in earnings per share to $1.01. Despite these results, Revelyst is expected to double its Adjusted EBITDA sequentially for the quarter and the year. These are the recent developments in the ongoing strategic shifts at Vista Outdoor Inc.
InvestingPro Insights
As Vista Outdoor Inc. (NYSE: VSTO) navigates strategic transactions, it's important for investors to consider the company's financial health and market performance. According to InvestingPro, Vista Outdoor has a strong shareholder yield, which is a positive sign for investors looking for companies that prioritize shareholder returns. Additionally, analysts predict that Vista Outdoor will be profitable this year, which may reassure investors about the company's future post-transaction.
InvestingPro data highlights several key metrics for Vista Outdoor: The company's market capitalization stands at $2.35 billion, indicating a substantial presence in its sector. The adjusted P/E ratio for the last twelve months as of Q1 2023 is 12.94, which may appeal to value-focused investors. Furthermore, Vista Outdoor has demonstrated strong returns over the last three months, with a total price return of 15.71%, showcasing the stock's recent performance momentum.
While the company does not pay a dividend, this may be offset by the potential for capital gains, as reflected in Vista Outdoor's significant price uptick over the last six months, culminating in a 26.62% total return. This performance is closely aligned with the company trading near its 52-week high, at 97.66% of this peak value. These metrics suggest a robust market confidence in Vista Outdoor, which could be a compelling factor for investors considering the stock amid the current acquisition discussions.
For investors seeking a deeper analysis, there are additional InvestingPro Tips available, providing a comprehensive view of Vista Outdoor's financial outlook. To explore these insights, visit InvestingPro at: https://www.investing.com/pro/VSTO.
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